2012-11-13
Survey: banks do not promise to tighten lending conditions; enterprises intend to apply to them more often
The Bank of Lithuania’s conducted surveys of non-financial enterprises and commercial banks revealed that business crediting would become more dynamic next year: banks are disposed not to tighten lending conditions, while enterprises that project business development will seek to attract the double amount of financial sources from the outside.
“Banks are forecasting an average 3 per cent growth in their loan portfolio, and some of them even expect an increase of 5 per cent,” said Virgilijus Rutkauskas, Chief Economist of the Macroprudential Analysis Division of the Financial Stability Department at the Bank of Lithuania. According to him, growth in enterprises’ demand for credit outpaced bank forecasts, while households’ demand for loans for house purchase remained unchanged in also the recent half-year.
A pick-up in demand for business loans forecasted by banks is also confirmed by the entrepreneurs’ intentions. The survey of enterprises showed that more enterprises intended to make use of the lending services provided by credit institutions–to take loans, use leasing and factoring services.
In the second half of 2012, non-financial enterprises will seek to attract more external funding sources. Construction enterprises project development to the greatest extent, while services enterprise–to the least. In the second half of 2012 non-financial enterprises will aim at funding nearly 15 per cent of business development from borrowed funds–significantly more than in the first half of 2012, when this value stood at 6.5 per cent.
Based on the results of the Bank Survey, in the next half-year (by April 2013) the lending conditions for households for house purchase are likely to remain unchanged, while the conditions for consumer and other loans to ease slightly.
Banks that participated in the Survey expect that in the next six months households’ demand for loans (both for house purchase and for consumption as well as other purposes) will increase, yet the increase will be slightly more moderate than six months ago.
In order to assess the changes in lending conditions and the trends in the funding of enterprise activities, the Bank of Lithuania surveyed staff in management positions of seven commercial banks and of four foreign bank branches. The company “Sprinter tyrimai” conducted a survey of the managers and financiers of 501 non-financial enterprises. Such surveys are conducted every six months.